WHAT’S EATIN’ NYC?
It’s not all doom and gloom for city restaurants as pandemic deals dissipate
IL POSTINO, a twodecade fixture of Midtown East, almost went under. When the Waldorf Astoria, a key source of covers, was shuttering for a condo conversion, Il Postino owner Luigi Russo knew he had to move fast, so he hired Douglas Elliman’s Matt Leto to find him a new home.
They scored a prime perch: a second generation, 3,547-square-foot space at 133 E. 61 St. once home to Nanni Il Valetto. It was asking $32,000 per month but Leto had argued that down by 20% or so. Then the pandemic hit, just as the lease was ready to sign. Russo didn’t balk, but instead asked Leto to haggle harder.
“There were nerves, but he knew this would be the right thing,” Leto tells The Post, noting that he scored some extra concessions, including reducing the rent by half for the first year to seal the deal last October. “But you wouldn’t be able to score a deal like that now,” Leto warns.
That’s because Manhattan’s pandemic-primed restaurant-pocalypse never really came to be. Of course, 2020 was a tough year for F&B in NYC — stats from tracking firm Datassential showed 82 spots in Manhattan shuttered in Q3 2020, including classics like the 21 Club. But a year later restaurants have rallied: We lost just 27 cafés and restaurants in that same quarter in 2021.
Restaurant leasing has always been a buoyant sector in New York, according to CBRE’s data: F&B tenants have typically been among the most active category and since 2010, they’ve represented between 25% to 39% of transactions.
Gloomsters might do a spit-take, but that’s still true, with 65 lease transactions so far this year, repping around a third of the total.
“Restaurants are taking space left, right, up, down and center,” said Retail by MONA’s Brandon Singer. “You’re seeing that all over the place.”
Some areas are particularly buzzy — Tribeca, for example.
“It’s the trifecta: A residential neighborhood that touches an office area, and when tourism comes back, people will go to the World Trade Center,” says CBRE F&B-focused broker Spencer Levy.
One spot ready for all three: Crew Restaurant Group’s new space, a 1,500square-foot lease for an oyster bar at 109 West Broadway wrangled by Lee & Associates — it paid market rate, but with a free rent concession to open early 2022.
Le Salon brasserie will be serving sooner, in November this year, on the corner of Greenwich and Harrison streets, with a 2,200square-foot ground floor and 1,940-square-foot cellar. The new tenants demolished and redesigned the site after taking over and signing a 10-year lease.
The size of Le Salon is the sweet spot right now, per CBRE’s Levy: every would-be tenant, he says, wants spaces 3,000 square feet or smaller. They also insist on second generation spaces, an easy shortcut to minimizing startup costs since the basics for cooking, and the vital permits, will be in place.
“I would never do a build out — raw space is really exciting, but unless the landlord is building it for you, why would you look at anywhere at this point?” said Mermaid Inn’s Danny Abrams, who just shunted his Greenwich Village oyster bar and reopened at 89 MacDougal St. on the corner of Bleecker in the onetime JG Melon space.
Look too at Jack & Charlie’s no. 118 on Greenwich Avenue: It commandeered the Rossopomodoro space for a supper club-inspired spot opening late October, with reduced rent concessions sweetening the deal. Douglas Elliman’s Matt Leto says at least 75% of the deals he’s striking are structured to offer major concessions for the first couple of years, before trad pricing kicks in at year three.
Then there’s the Open Streets program, which lets restaurants open Eurostyle sidewalk cafes. It was created as a pandemic-era band-aid but has been extended – at least for now; details of a permanent program are emerging, but hazy. “I lost a deal this year because someone outbid us — we were too conservative in our offer, and they were betting on the number of outdoor seats,” said CBRE’s Levy, noting that this was a site on two streets, maximizing that offer. “I think there’s a real reason to pay a premium for corners.”
Mermaid Inn’s Abrams has seen such standoffs firsthand.
“There’s a game of chicken going on,” he said. “The closer it gets back to normal, the more the landlords hold on. There was room to move in 2020, but that’s tightening up a little in 2021.”
Abrams notes, though, that 2022 could look very different: the pandemic-related eviction moratorium finally expires in January.
“There’s gonna be a lot of spaces available then,” he said.